Designated Funds

[northside]

I have version 11.5 - I am trying to get the designated funds in contributions set up properly.

Here is my example. We have money deposited with the regular Sunday morning offering such as Youth Snack Money, Donations to the children or youth ministry, book payments, trip payments etc. What is the best way to set this up so I can record to equal the bank deposit but be able to transfer it to the right account such as Youth, Awana, Children, Missions etc.

[NeilZ]

I have version 11.5 - I am trying to get the designated funds in contributions set up properly.

Here is my example. We have money deposited with the regular Sunday morning offering such as Youth Snack Money, Donations to the children or youth ministry, book payments, trip payments etc. What is the best way to set this up so I can record to equal the bank deposit but be able to transfer it to the right account such as Youth, Awana, Children, Missions etc.

Here's the question. What do you mean by 'transferring to the right account' ?? If you have these Contributions Funds setup correctly, when you Post Contributions, the system should create the transactions to properly Credit the income accounts for those activities.

If you could explain what exactly you are doing or trying to do?

[northside]

Example - The lady before me posted manually any designed funds to a miscellaneous income account them transferred them to the youth expense account if they money was designated for the youth. Does this make sense?

[NeilZ]

Example - The lady before me posted manually any designed funds to a miscellaneous income account them transferred them to the youth expense account if they money was designated for the youth. Does this make sense?

Um .. she was doing it wrong.

You do NOT post funds to an expense account as you no longer show the actual income, nor do you then show the actual expenses.

What you do is have a separate income account, and a separate expense account. You see how much comes in, you then know how much you have to spend. You can tie those two accounts together using a subaccount number to help you track it a bit easier. But the only time you put funds back into an expense account is if you get a refund from an overpayment, or a monetary credit on a previous purchase.

If you have designated funds coming in from Contributions you should have a separate income account to account for those funds. So if you have a Youth Contribution Fund, you will have a 4000 level income account in Funds Accounting for Youth.

If you really need to temporarily restrict such funds to only release income when a check is written you'll create Temporarily Restricted Income Accounts (along with release accounts) for each such fund. When you write a check, you would then click on the 'Release Restricted Funds' button, select the restricted fund and enter the amount and any notes on the release.

That may be overkill, but you would create Temporary Restricted Funds using the Maintain Donor Restrictions function.

[northside]

Thanks so much for the information!!

Is there a way I do this so it will affect the budget?

Example - When they give to the youth department, the amount to spend for the year should increase?
I have my budgeted amount under the Youth expense.

Thanks!

[NeilZ]

Thanks so much for the information!!

Is there a way I do this so it will affect the budget?

Example - When they give to the youth department, the amount to spend for the year should increase?
I have my budgeted amount under the Youth expense.

Thanks!

No, it won't update the budget as that is not normally something that is automatically changed. The church board can increase the operations budget for an expense account, but it should not be something that is done without approval.

What I would do is add another expense item for Youth, but an unbudgeted expense and tie it to the youth income and release accounts as I mentioned above with a subaccount number. The subaccount standard report will then show how much has been designated to youth, and how much of those funds have been spent. The reason this report does this is that it will show the income, how much was released, and what was spent.

This will show up in the Income & Expense Report as an unbudgeted expense, but then the income should also show up as unbudgeted income.

The reason you do this is that a church, because it is cash based should always budget on pledged income (if you do pledges) and/or last year's actual tithes and income to the operations fund. If you don't you really don't know how much income over and above normal tithes and offerings the church is taking in, as well as how much the church is spending over the normal tithes & offerings.

You're not getting a full financial picture of the church.

Your finance committee may want to invest in a good resource on this:

http://store.churchlawtodaystore.com/churchfinance.html

Its a bit pricey, but then its targeted to a rather defined audience.